Thursday, April 30, 2015

Fiji maintains rate, confirms higher 2015 growth forecast

    Fiji's central bank maintained its benchmark Overnight Policy Rate (OPR) at 0.5 percent, saying the objectives of monetary policy were "comfortable" in the near term despite pressure on foreign reserves from growing imports.
    The Reserve Bank of Fiji (RBF), which has held its rate steady since November 2011, confirmed its forecast for the country's economy to expand by 4.3 percent this year, an upwards revision of its forecast of 4.0 percent that was released in the 2015 national budget.
    The RBF already issued the revised forecast on April 10, reflecting higher government expenditure, particularly capital spending.
    Fiji's Gross Domestic Product expanded by 4.1 percent in 2014 and the International Monetary Fund earlier this month forecast 3.3 percent growth this year.

    The Reserve Bank of Fiji issued the following statement:
"The Reserve Bank of Fiji Board at its monthly meeting on 30 April agreed to maintain the Overnight Policy Rate at 0.5 percent.
In announcing the decision, the Governor and Chairman of the Board, Mr Barry Whiteside stated that “the Fijian economy is expected to perform better-than-anticipated in 2015 with growth projections revised upward to 4.3 percent from 4.0 percent.
Governor Whiteside highlighted that the pressure on foreign reserves remains given Fiji’s growing import demand for consumption and investment related goods.
The Governor stated that “in its current assessment, both objectives of monetary policy are considered to remain comfortable over the near term.” 
Inflation rose to 2.4 percent in March, from 2.1 percent in February, mostly due to higher food, alcoholic beverages and tobacco prices. However, the recent announcement on the reduction in domestic fuel prices by the Fiji Commerce Commission is expected to ease inflationary pressures in the months ahead. Foreign reserves are currently (30 April) around $1,857.0 million, sufficient to cover 4.6 months of retained imports.
The Governor emphasised that any change to monetary policy will be guided in particular by the developments on the outlook for foreign reserves."


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